Escalating violence in
Brent crude futures rose 2% to
The prospect of rising oil prices because of the turmoil in
"With inflation edging up in the US there will be concerns that CPI [consumer price index] growth might get out of hand and force the Federal Reserve to take action. This is the worst-case scenario, but markets are more than capable of focusing on that to the exclusion of all others."
Concerns that the Iraqi army, controlled by the Shi'ite-led government in
The AA advised motorists not to panic and said the short-term effect on prices at pumps was likely to be small. It pointed out that when the US considered military action against
The AA said: "A short-term surge in the oil price no longer guarantees that pump prices will shoot up 8p or 10p a litre as they did during 2011 to 2013."
Despite the volatility in the market, Opec predicted oil markets would be balanced in the second half of the year as extra production met growing demand.
Energy shares led the
The turmoil in
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